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Not Your Father’s Energy Committee

By Kennedy Maize

Washington, D.C., January 28, 2011 – The Senate Energy and Natural Resources Committee in the 112^th Congress won’t be your father’s Senate Energy and Natural Resources Committee (and certainly not Lisa Murkowski’s father’s committee).

With a slew of newcomers – mostly Republican – and none of them particularly attuned to the way the committee has historically operated, look for a more partisan, contentious, and ideological committee. That also suggests an outlook for a committee that doesn’t get very much done in the next two years.

But the new lineup also represents increased strength on the committee for an interest already well represented: coal.

So it doesn’t look good in the Senate Energy Committee for President Obama’s “clean energy standard” initiative, in whatever form it eventually emerges from 1600 Pennsylvania Avenue for the trip uphill to Congress.

For as long as I’ve been covering the Senate Energy Committee – and that’s more than three decades – the committee has been mostly non-ideological, bipartisan, and generally pro-industry. The fault lines on the committee have been regional, divided along home-state resources lines: coal states versus oil states, for example. That made compromises easy. It was a matter of giving each interest what it wanted, in return for supporting the others’ resource agenda. The committee was also dominated by producer states, with consumer interests seldom at the forefront.

The former and current chairman, New Mexico Democrat Jeff Bingaman, represents a significant energy producing state, with oil and gas, coal, and uranium prominent products of the Land of Enchantment. He’s been a master at divvying up legislative goodies to assemble majorities for energy legislation over his years alternating as chairman and ranking Democrat.

That’s going to be harder now. The five freshmen from the Grand Old Party have their parochial resource interests, for sure. Rand Paul of Kentucky, for example, represents an important coal state. He replaces Jim Bunning, another Kentucky Republican and promoter of coal on the committee. Utah’s Mike Lee also hails from coal country, replacing Bob Bennett of Utah, whom he knocked off in a GOP intra-party ambush.

Lee and Paul are also founders of the so-far anemic, four-member Senate Tea Party caucus, along with their mentor and promoter, Sen. Jim DeMint, the quixotic South Carolina Republican. The fourth member is Jerry Moran of Kansas. It’s unlikely either Paul or Lee will be orthodox and predictable.

The other new GOP members of the energy panel are better known: Rob Portman of Ohio, Dan Coats of Indiana, and John Hoeven of North Dakota. All represent coal states and can be expected to protect and advance interests of the coal industry during the work of the committee. The returning Republicans are Lisa Murkowski of Alaska (she’s the senior Republican and her dad was once the chairman), Richard Burr of North Carolina, John Barrasso of Wyoming, Jim Risch of Idaho, and Bob Corker of Tennessee

The partisan balance on the committee is 12 Democrats and 10 Republican. On the majority side, the most significant newbie is Joe Manchin of West Virginia, who rescued a faltering campaign by taking aim (literally, with a rifle in a TV ad) at Obama’s coal-antagonistic energy policy, the failed cap-and-trade legislation. Also joining committee Democrats for the first time are Al Franken of Minnesota and Chris Coons of Delaware, both expected to be dependable votes for whatever the White House wants done.

The returning Democrats are Bingaman, Ron Wyden of Oregon, Tim Johnson of South Dakota, Mary Landrieu of Louisiana, Maria Cantwell of Washington, Debbie Stabenow of Michigan, Mark Udall of Colorado, and Jeanne Shaheen of New Hampshire. Independent Bernie Sanders of Vermont, a Democrat in everything but name only, is also a committee member.

What does the committee membership bode for Obama? His clean energy standard proposal will find a skeptical reception. The White House cleaned up the “renewable energy standard” concept to make it more palatable to folks not much interested in wind and solar, while adding nuclear and “clean coal,” without defining what clean means. But if it walks like a renewable standard, and quacks like a renewable standard, then…well, you know the punch line.

Obama first problems will be among his fellow Democrats. Landrieu has well-known grievances with the Obama approach to energy, growing out of the administration’s on-again, off-again approach to offshore oil and its general antipathy to oil companies. Udall, despite environmentalist credentials, represents a major energy producing state. Bingaman himself has had nothing to say about the Obama state-of-the-union proposal (nor has Murkowski).

Bingaman is likely to have problems with Landrieu. She said, “I don’t think the renewable portfolio standard the way it is drafted now has a chance so we’re going to have to try a new approach.” Then there is the always ebullient Manchin, who said of Obama’s inclusion of what is likely to be carbon capture and storage as the definition of “clean coal,” “We’re going to give them all the clean coal they need.” That’s likely to be a lot more than the wind and solar advocates can stomach.

The real problems begin on the Republican side, where the five new voices add considerable mystery to any legislative outcome. Paul made his political chops by favoring chopping all forms of subsidies as part of a general push for less spending and less government. He’s unlikely to be philosophically in tune with federal mandates on how companies generate electricity. All he has said so far is that he wants to see a concrete proposal so he can study it. Utah’s Lee has made it clear he’s most interested in federal lands issues. Their mentor, DeMint, told Politico that he’s not in favor of Obama’s plan, which “is trying to pick winners and losers.” Tea partiers, he said, “are for a clean environment but they want to do it rationally.”

In 2009, Bingaman was able to maneuver through his committee to get approval for a renewable mandate as part of a larger energy bill that died after it passed the committee. It doesn’t look like he will be able to duplicate that feat, much less get something through the full Senate. If he does manage that daunting task, it will be through major concessions to coal interests.

EV’s? Here Come the Hydraulic Hybrids

By Kennedy Maize

Washington, D.C., January 24, 2011 — While many of us have fixated on electric approaches to vehicle propulsion, the U.S. Environmental Protection Agency has been working on another technology that may turn out to be a killer ap for conventional gasoline cars. Earlier this month, with little fanfare or hoopla, Chrysler announced that it will roll out a Town & Country minivan with an internal combustion engine powering a hydraulic motor. Chrysler said it is considering the technology for its signature 300 sedan, as well.

The Detroit-based car company (unofficial motto: we’re number three) made the announcement, not at the storied Detroit Auto Show, which was going on at the same time, but at EPA’s National Vehicle and Fuel Emissions Laboratory in Ann Arbor. CEO Sylvio Marchionne (also the head of Italy’s Fiat, which owns Chrysler) said his company will test a dozen or so minivans next year. If they work well, they could be on the market by 2013.

EPA Administrator Lisa Jackson touted the technology her agency has been working on for 15 years, saying that it can improve energy efficiency by 35%, cut greenhouse gas emissions from each vehicle by 40%, adding only 15% to the base price of the vehicle. EPA and its private-sector research partners have deployed the gas-hydraulic engines successfully in some UPS delivery trucks, and in off-road trucks used to transfer shipping containers at the ports of New York, New Jersey, and Rotterdam in the Netherlands. Jackson said EPA will put $2 million of its funds into the Chrysler project.

The hybrid technology appears to fit well with American habits and tastes in vehicles, which tend to run to large and powerful. The Ford F-150 light-duty pickup truck has been the best-selling vehicle in the U.S. for 29 consecutive years. Ford’s revamped Explorer SUV, which is getting rave reviews, was named “Car of the Year” at this year’s Detroit show along with the Chevy Volt plug-in hybrid. (For a commentary on the future of electric vehicles in the U.S., see my article at ElectricityPolicy.com)

The EPA technology uses an internal combustion engine to power a pump that pushes hydraulic fluid into a device called an “accumulator.” It stores the fluid at a high pressure, maintained by pressurized nitrogen gas. The hydraulic fluid drives motors that turn the vehicle’s wheels.

According to the EPA, the hydraulic hybrid offers regenerative braking recovering over 70% of the energy normally wasted during braking; optimum engine control without the need for a drive shaft and transmission and without the weight of batteries; and the ability to completely shut off the gas or diesel engine when not needed, which is most of the time in stop-and-go driving.

EPA claims the technology is quite versatile, useful in cars, light-duty trucks (including SUVs), and heavy-duty urban vehicles. It also pairs well with advanced diesel engines, developed in Europe, that offer large efficiency gains compared to gasoline engines. The technology can also work on tiny applications, according to the agency, which is working on a people-powered hydraulic hybrid bike.

In touting the technology — which had its origins in a Clinton-era government-private program called the Partnership for a New Generation of Vehicles — EPA stresses its simplicity. It “does not require breakthroughs to be cost effective or to be manufactured, and can be produced with the skills and manufacturing base already available in the U.S.” In the face of the demands of gas-electric hybrids and all-electric cars for exotic rare earth metals, EPA notes that the hydraulic technology “doesn’t rely on complicated or expensive materials…”

Will hydraulics chase electricity out of the vehicle market? That’s hard to tell, as the electrics have a large head start, with real vehicles for sale to real consumers. But those consumers will be the ultimate decision makers. They have chased electric vehicles out of the market before. A hundred years ago, electric cars were the choice for discriminating buyers such as Clara Ford, who preferred her 1914 Detroit Electric Brougham to her husband Henry’s loud, smoky rattletraps.

China Nuke Dreams: Paper Dragon?

By Kennedy Maize

Washington, D.C., January 17, 2011 – With Hu Jintao, China’s president, in Washington this week, it is worth taking a look at that mammoth country’s energy future. More specifically, it is valuable to look at China’s announced ambitious nuclear power agenda and ask whether it can be realized.

China at the end of 2009 had only 11 nuclear units at six stations operating in the country, with an installed capacity of 9 GW, or about 1.3% of the total installed electric generating capacity. This despite a nuclear energy program that began about the same time as that of Britain and before France discovered nukes. While the Chinese nuclear program has centered on weapons, the country since the early 1970s has stated a desire to develop a robust civilian power program, to little avail. Earlier plans to boost civilian nuclear power in China largely failed.

Now China is pushing atomic power in a big way. Remember that, mimicking the days of Stalin and the Soviet Union, China pursues progress through central five-year plans (regardless of whether those plans come to fruition, which they seldom do). The 10^th FYP, for 2000-05, called for construction of 14 new reactors. In 2005, the new plan called for 40 GW of nuclear by 2020, with another 18 units under construction. The 2009 plan calls for 65 GW by 2020.

Will this happen? It is easy for Americans to be mesmerized by China. The country’s propaganda pushes that state of policy hypnosis. We largely view the country as a centrally-planned monolith where, when the party says “jump,” the people ask, “how high and when may we come down?”

But China scholars caution that it’s lot messier than that on the ground, where competing forces swirl and swarm around major economic and policy issues. The New York Times recently quoted Brent Scowcroft, former national security advisor to George H.W. Bush and mentor to Defense Secretary Robert Gates, “There is a remarkable amount of chaos in the system, more than you ever saw dealing with the Chinese 20 years ago. The military doesn’t participate in the system the way it once did. They are more autonomous — and so are a lot of others.”

In her new book “The Politics of Nuclear Energy in China,” Xu Yi-chong at Griffith University in Brisbane, Australia, warns readers not to be seduced by the image that China has, and perpetrates, in the world outside. She suggests that while China may be able to pull off a great nuclear leap forward, it’s not a given.

The raw numbers are daunting. Notes Xu, China will have to build two-to-three new units every year over the next decade. “At its peak,” she writes, “the U.S. managed to build 4.63 units a year. France built 13 units in 1976-1980 and another 24 units in 1981-1985, an equivalent of 3-4 units a year. The construction span was 67 months.” If China could equal the French pace, it might hit 40 GW by 2020 with another 20-30 in the pipeline, close enough to the 65 GW target for government work.

A relevant aside here: should China succeed in meeting its nuclear goals, it would still be a pipsqueak in the world of civilian nuclear powers; 40 GW of nukes would amount to only 2.7% of the country’s generating capacity, by Xu’s figures. Nukes produce 75% of French electricity, 29% in Japan, 35% in South Korea, 20% in the U.S., and 20% in Taiwan, the break-away island nation that China still claims as its own.

Getting there won’t be easy, says Xu. There are competing demands for financial resources in China, and for development. China has the money, she says, but faces a bifurcated population with demands for economic equity “between the richer and more developed coastal regions where nuclear power plants probably will be built and poor interior provinces whose demand for financial resources is even greater, equity between the nuclear and other energy sectors, and equity between those whose electricity consumption is reaching the level of middle-income countries” and those millions without any electricity at all.

Philip Short’s extraordinary 1999 biography “Mao: A Life,” (at 782-pages, it is a large red book) makes the fundamental point that China’s revolution, while nominally Communist, was built on the backs of the rural peasantry. Since the 1949 revolution, the party’s largest fear is a counter-revolution by the rural, plow-pushing proletariat if it perceives it is being left out of Chinese economic progress. In China, Xu notes, everything, including the choice of energy technology, “is political.”

While China is a one-party state, not accountable through elections, the internal politics are real and decisive. “Evidence shows that nuclear energy expansion in China is not, as is occasionally implied, devised out of a single plan from a dominant regime, transferred from the top level of government to its scientists and the industry,” Xu argues. “Decision making in this sector has always been based on a fragmented authoritarian structure. It has become more fragmented and competitive as the debate among various interests is brought into the open and has become increasingly lively.”

So, as Mr. Hu comes to Washington, will his country’s nuclear ambitious bloom? According to Professor Xu, it is an open question.

Xu Yi-chong, “The Politics of Nuclear Energy in China,” Palgrave McMillan, 2010.

Game Over: FERC 1, WSJ 0

By Kennedy Maize

Washington, D.C., January 11, 2011 — The Federal Energy Regulatory Commission this week engaged in a spitting match with the editorial page of the Wall Street Journal. FERC won.

At issue is the commission’s Dec. 16 order sorting out the incredibly complex issue of how to connect remote renewable generation into the giant regional grid run by the Midwest Independent System Operator. As issues go, this is right up near the top on mind-boggling matters that come before the FERC. the 193-page order is a thicket of competing and conflicting interests; arcane legal, economic, and regulatory concepts; and incomprehensible acronyms. As someone who has followed the agency pretty closely since it was created in the late 1970s, these issues and this order are far from easily digested.

The Wall Street Journal didn’t even try in its Dec. 30 editorial, slamming the decision as some sort of creep socialism that is both unconstitutional and illegal. The journal, no surprise here, is driven by ideological fervor, not facts, in its take on the order. The reach of the editorial conclusion — “in fact, this is the first step in a FERC scheme to socialize transmission costs nationwide” — is entirely over the top. The journal also singles out Jon Wellinghoff, FERC chairman, as personally responsible for this decision, which, the journal claims, tries “to establish by regulatory fiat a national energy policy that Congress has refused to endorse.”

This is all nonsense, as the commission gently noted in a reply to the newspaper, printed on Jan. 10. The letter from Wellinghoff and the other four FERC commissioners (Democrats and Republicans alike) said, “While we approved a recent proposal on who pays for new transmission facilities in the Midwest, that proposal was not developed by FERC. Rather, that proposal was submitted to FERC, based on months of negotiations among diverse stakeholders from 13 states in the Midwest. The proposal’s objective is to promote the development of needed transmission capacity.”

The WSJ’s editorial, in its Michigan-centric rhetoric, betrays what’s really going on with the FERC order and who really objects to it. The order, said the journal, “will force Michigan to pay about 20% of as much as $20 billion in new high-voltage transmission lines — though Michigan businesses and homeowners will get little benefit.” The editorial calls on Rep. Fred Upton, the Michigan Republican who now chairs the House Energy and Commerce Committee, to reign in the regulators.

What’s going on here is that Michigan has boxed itself into a regulatory corner, by adopting a statewide renewable energy portfolio standard that does not count out-of-state renewable power flowing into the state as meeting its renewable requirements. Now that’s unconstitutional, a violation of the Commerce Clause. FERC correctly rejected the state’s request that, because it has put up trade barriers aimed at interfering with interstate commerce, it should be exempted from the MISO’s proposal. Michigan will benefit from additional power resources on the regional grid, whether or not they count against the state’s RPS, and should pay something for that. FERC correctly chose to balance the interests and rejected Michigan’s attempted free ride. Michigan business interests, on the other hand, have managed to snow the scribes on the WSJ’s editorial page into supporting a rent-seeking endeavor.